Survey of Non-Bank Mortgage Lenders, first quarter 2021

Released: 2021-09-01

Non-banks report slowing growth in residential mortgages extended in the first quarter

After three quarters of continuous growth, non-bank lenders extended fewer mortgages in the first quarter of 2021 – potentially due to slowing demand after eight quarters of continuous price increases of residential mortgage loans, as well as normal seasonal decreases at this time of year.

The total value of residential mortgage loans extended by non-banks decreased by 9.9% to $51.9 billion in the first quarter. The total number of these mortgages declined by 17.3% from the previous quarter to 191,831, but was up 34.4% compared with the first quarter of 2020. Mortgages extended during the first quarter of 2021 represented 15.3% of the total value and 11.2% of the total number of outstanding residential mortgages held by non-banks.

The majority of the value of mortgages extended in the first quarter were uninsured (62.9%). The value of uninsured mortgages extended decreased by 7.5% to $32.7 billion, while the number fell by 18.9% to 122,525 mortgage loans. Insured mortgages extended also declined in value (-13.6% to $19.2 billion) and number (-14.5% to 69,306 mortgages).

The average value of uninsured mortgages extended increased by $32,751 to $266,510 in the first quarter, while the average value for insured mortgages extended rose from $274,515 in the fourth quarter of 2020 to $277,318 in the first quarter of 2021.

One of the purposes of this release is to provide a more detailed picture of non-bank lenders, which were divided in two categories: credit unions and other non-bank lenders (the last category includes insurance companies, trusts, mortgage finance companies, mortgage investment entities and other lenders). Other non-bank lenders accounted for 53.9% of the survey sample, while credit unions made up the other 46.1%.

Credit unions extended 97,729 mortgages in the first quarter with a total value of $22.4 billion―four-fifths of that value was uninsured (81.7%) while the other one-fifth was insured (18.3%).Other non-bank lenders extended less mortgages at 94,102 mortgages, but at a higher total value than credit unions, ($29.5 billion). Just over half of that mortgage value (51.3%) was insured. This is reflected in the higher average value ($313,106) of a mortgage extended by other non-bank lenders, while credit unions had an average extended mortgage value of $229,308.

Chart 1 
Value of mortgages extended by quarter, insured and uninsured (millions)

Total value of outstanding residential mortgages edges up

The total value of outstanding residential mortgages held by non-bank lenders edged up 0.4% in the first quarter to $338.9 billion. The overall number of outstanding mortgages was relatively unchanged (-0.1%) at 1,717,693. The average value of an outstanding non-bank mortgage edged up $1,025 to $197,286.

Uninsured mortgages, which represented 61.4% of total outstanding non-bank mortgage value, increased in value (+2.2% to $208.0 billion) and in number (+0.8% to 1,148,139) in the first quarter. In contrast, the value and number of outstanding insured mortgages both decreased in value (-2.4% to $130.8 billion) and in number (-2.0% to 569,554).

Chartered banks reported similar changes, with a 3.8% increase in the value of uninsured mortgages to $880.1 billion, while the value of insured outstanding mortgages decreased by 1.9% to $472.5 billion.

Despite accounting for a smaller share of the survey sample, credit unions held more value and number of outstanding mortgages than other non-bank lenders. Indeed, by dividing lenders into quartiles based on the total value of their outstanding mortgages (with the smallest lenders being in the first quartile and the largest in the fourth), almost three quarters (73.7%) of credit unions were in the third or fourth quartile. Credit unions held 1,339,527 mortgages in the first quarter, with a value of $225.8 billion. Almost three-quarters (72.5%) of that value was uninsured while the other 27.5% was insured. Conversely, 70.2% of other non-bank lenders were deemed small or medium size lenders (first or second quartile), and they held 378,166 outstanding mortgages worth $113.0 billion, with 60.9% insured and 39.1% uninsured.

Chart 2 
Value of outstanding mortgages by lender, insured and uninsured (millions)

Value and number of mortgages in arrears for over 90 days decreases for the third consecutive quarter

There were 3,387 residential non-bank mortgages in arrears for over 90 days in the first quarter, down 11.3% from the previous quarter. The total value of these mortgages decreased 6.0% to $867.4 million, while their average value rose from $241,499 to $256,088.

Two-thirds of the value of mortgages in arrears over 90 days was uninsured (66.4%), down 5.4% from the fourth quarter of 2020 to $576.0 million. The number of mortgages in arrears decreased by 11.7% to 1,853 mortgages. One-third of the value of mortgages in arrears for 90 days or more was insured (33.6%). Both the number (-10.8% to 1,534) and value (-7.1% to $291.4 million) of insured mortgages in arrears were down in the first quarter.

Credit unions saw the most mortgages in arrears for more than 90 days at the end of the first quarter, at 1,795 mortgages (with a value of $270.5 million, of which 62.1% was uninsured and 37.9% was insured). However, other non-bank lenders had the highest value of mortgages in arrears over 90 days, with 1,592 mortgages in arrears, with a value of $596.9 million – more than twice the value of credit union's mortgages in arrears. Three-quarters of these mortgages were uninsured, despite other non-bank lenders holding more insured outstanding mortgages.

These mortgage loans represented 0.26% of the total value and 0.20% of the total number of outstanding non-bank mortgage loans at the end of the first quarter. Smaller lenders (those in the first quartile), had more mortgages in arrears for over 90 days compared with other larger lenders, with 3.2% of their total outstanding mortgages in arrears for more than 90 days. Conversely, lenders in the third quartile had the lowest share of outstanding mortgages in arrears over 90 days—at 1.4%.

With physical distancing measures and government relief measures still in place at the time of this release, the economic effects of the pandemic on mortgage lending are expected to continue through 2021 and into 2022.

Non-banks continue to defer fewer mortgage loans in the first quarter

Non-bank lenders declared that the total value of deferred mortgages decreased for the third straight quarter, falling from $8.6 billion in the fourth quarter of 2020 to $6.9 billion in the first quarter 2021, a decline of 20.1%. The number of mortgages deferred declined 16.7% to 29,713. The average value of a deferred mortgage decreased from $241,917 to $232,069.

Most lenders offered deferred mortgages for a short period of three to six months in 2020, to help customers deal with the financial challenges caused by the COVID-19 pandemic. The continued decrease in deferred mortgages reflects clients repaying their deferred payments.

Two-thirds of the value of mortgages deferred was uninsured (66.8%) and was valued at $4.6 billion—down 25.5% from the fourth quarter of 2020. The number of uninsured deferred mortgages decreased 20.9% to 20,592. One-third of deferred mortgages were insured. The value of these mortgages decreased 6.5% to $2.3 billion, while the number of insured deferred mortgages fell 5.5% to 9,121. Lenders of all sizes deferred more uninsured mortgages than insured.

For more information on housing statistics, visit the Housing Statistics Portal.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).